Making Sense of Your Property Assessment
When you get your property assessment in the mail this year, you might be in for a surprise. The newspapers have been talking about how the market has cooled considerably, and sales are at a ten-year low. But don’t expect your property value to have decreased just because of a dip in sales. The way you are taxed is not reflective of the rate of churn.
You may be shocked to find that your home has actually gone up in its assessment. The market has slowed significantly so people expect lower assessments. It’s not always the case. I have a lot of people asking me how this could affect the sale price of their properties. The assessed value is linked to the amount you owe in property taxes. It’s not an accurate reflection of what your home is really worth, should it be sold. Some assessments will be too high; some too low...and most buyers know the assessed values are not a reliable indicator of what they should pay for a property. You will need a Vancouver real estate agent to give you a better idea, because those of us who’ve lived here long enough know the ebb and flow, and the prices per neighbourhood, regardless of a superficial knee-jerk assessment.
Here is a quick explanation of the reasons why a BC government property assessment and a properly prepared market assessment of your home may be different.
Of course, if you have questions about your assessment and how accurate it is, contact me right away. If you want to appeal your assessment, I will get back into lawyer mode and we can look into that too. NOTE: Assessments must be appealed by the end of January 2013.
Here are the basics of what you need to know.
There are two main reasons that property value does not equal market value: timing and the information used to arrive at the value.
Timing: Property assessments are based on government estimates of the value of the home as of July 1st of the previous year. By the time you receive your property assessment it is already six months out of date. A proper Vancouver REALTOR® assessment is usually accurate within a few days.
Information used: Assessors value approximately 2 million properties every year. A Vancouver REALTOR® will assess 100 tops. We therefore have time to look at a house carefully. It is impossible for an assessor to be familiar with 2 million houses, their renovations, street appeal, etc. They look at fundamentals like lot size and house age but are not able to factor in other important elements that can add (or detract) from a property's value. Assessors use a mass appraisal system where a good Vancouver REALTOR® will look at each home individually and will have been in not only the home they are valuing but also the other homes which they are comparing it to in order to determine likely market value.
Property Assessments seem to cause homeowners a lot of frustration because often they will expect the assessment to reflect value or they expect their neighbour's home that is not as nice as theirs to be given a lower assessed value but that is not always the case. I tell my clients to ignore the assessed value except as an indicator of what may happen to their property taxes...AND if the assessed value is too high, appeal it UNLESS you plan to sell your home in the upcoming few years.
If you have questions about your home assessment, or more importantly about the market value of your home, please contact me.